Executive compensation: Demystifying total shareholder return (TSR)

For the last decade, companies have been required to disclose executive pay and performance information compared to a peer group. Regular debates continue as to whether “Absolute” TSR (Total Shareholder Return) or “Relative” TSR is the truer representation of performance for executive compensation calculations.

In this episode, Tom McNeill, Partner & Lead Consultant, Meridian Compensation Partners, looks at the definitions and pros & cons of both executive compensation measures.

• What are the pros and cons of Absolute TSR vs. Relative TSR?
• How should compensation committees resolve the Absolute vs. Relative TSR debate?